My Cable Company Is Raising Prices Unless I Enroll in Auto-Pay. Is It Safe?

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Payment technology and culture advanced so quickly that the time when you could get a discount on your monthly bills by agreeing to paperless electronic statements has become “the good ol’ days.”

Now, you may have to enroll in auto-pay in addition to paperless billing in order to get a discount (or avoid an extra charge).

That presents a dilemma. If you want to spend less and save more, getting a $5 discount on your monthly cable or cell phone bill is attractive. On the other hand, money expert Clark Howard has long warned against giving a company the right to draft from your checking account through automatic bill pay.

Should you accept auto-pay in order to save money? That’s what a listener of the Clark Howard Podcast recently asked.

Is It Safe To Enroll in Auto-Pay To Avoid Additional Charges for Cable, Cell Phone Coverage or the Gym?

Is it safe for me to enroll in auto-pay for monthly bills in order to save money?

That’s what a Clark listener wondered on the April 18 podcast episode.

Asked Greg in Georgia: “AT&T U-verse sent us an email advising that they’re increasing our cost $5 per month unless we go to paperless billing AND auto-pay.

“We’re already on paperless billing but not auto-pay. (We prefer that no one have the ability to get money from our account.) How do you feel about this?”

There’s a reason these companies are opting to offer discounts to customers who elect to auto-pay every month. And it’s probably a net win for them in terms of profitability, Clark speculates.

“There are a number of companies going to this thing — cell phone carriers and the rest — where if you don’t pay electronically by auto-pay, they’re going to charge you more,” Clark says.

“When somebody doesn’t pay, they’re [incurring] the expense of reminding them and if necessary having somebody from the collections team go after them. So it’s almost like an insurance policy for [the companies] offering you a lower price. Because it saves them so much money down the road.”

Ranking Your Auto-Pay Options From Safest To Least Safe

So back to the question. Is automatic bill pay safe?

You may never love the idea of giving a company the right to charge or debit money from you on a recurring basis. But there’s a spectrum of options from most to least safe.

1. Auto-Pay With a Credit Card

Clark says it best: “If you can, auto-pay by credit card. You have tremendous protection from any abusive behavior by the company. So I would feel comfortable doing the auto-pay and getting the $5 discount simply by tying it in with a credit card.”


Clark loves paying for almost anything with a credit card. You can dispute a transaction if a company charges you inadvertently, such as after you’ve canceled a service. You can also earn cash back by paying with one of the best rewards credit cards.

2. Create a Separate, Siloed Checking Account

Unfortunately, some companies won’t allow you to auto-pay with a credit card.

“Cell phone carriers are starting to say if you don’t pay a draft from a checking account, we’re going to charge you more,” Clark says. “So it’s becoming a game of cat and mouse between you, me and the businesses.

“They want your money the way they want your money.”

If a credit card isn’t an option, there’s still a relatively safe way to utilize auto-pay. It takes a bit of work, though:

  • Open a new checking account.
  • Deposit a small amount of money into that account — perhaps enough to cover six months or one year of payments.
  • Set a reminder to transfer more money into that account before it runs empty.
  • Set up online bill pay through your bank.
  • Enroll in auto-pay.

In this instance, it doesn’t matter how much money you keep in your main checking account. The company billing you can only pull from this siloed new account that you’ve stocked with a small amount of money.

“The greatest abuse? You’re no longer a customer and they continue to take your money,” Clark says. “If you have a separate account it’s debiting from and you’re worried about them maybe abusing you, you can go ahead and shut that account down when you discontinue whatever service it is.”

3. Use Your Main Checking Account Via Online Bill Pay

You should avoid giving your cell phone company, streaming platform or fitness membership access to your main checking account.

But if you do, please avoid automated debit transactions, Clark says. That allows an open-ended arrangement. Also, automated debits always go through even if you don’t have enough money in your account to cover them.

That’s why Clark wants you to use online bill pay. That becomes extremely important if you’re going to use your main checking account for auto-pay, which Clark advises against.


“You never want to give a company the right to draft from your checking account,” Clark says. “The reason why is: They can mess up! That money can disappear from your account and it can be very difficult to get it back.”

Final Thoughts

Auto-pay via a credit card is safe. If that’s an option, you should absolutely do it in order to save on your monthly bills.

If your only choice is to allow a company to take money from your checking account each month, consider opening a separate checking account and funding it only for that express purpose. And make sure to use online bill pay rather than automated debit transactions.